Tuesday, 15 April 2014

Trust is in flux and consumer groups must seize it back

CI Director General Amanda Long argues consumer activists must challenge the corporate occupation of trust in the digital age.

Who do you trust? This is a question that has popped up at part of the #ConsumerTrends questionnaire we launched earlier this week.

It’s an incredibly important question, as I believe consumer trust, consumer decision-making and consumer power are changing in profound ways.

If those interested in consumer rights, justice and protection are to remain relevant and immediate to the lives of the consumers we represent, we must meet them where they are and address the questions they seek answers to every single day.

Of course, many of the world’s most successful consumer groups have built their legitimacy and legacy on doing just that. Consumers International was founded in 1960 by five groups dedicated to testing products to help consumers make better everyday purchasing decisions.

But as consumer decision-making evolves in the digital age traditional consumer activists risk giving away relevance and legitimacy to others whom have already identified - and are acting upon - these trends.

In fact, the uncomfortable reality is that corporations are already starting to do this very successfully.

There are many respected international studies out there on brand meaning and consumer trust that are pointing to the same conclusion – that consumers are increasingly making purchasing-decisions based on values, not just value. That we want to make meaningful choices, not just functional ones. And that we are becoming mindful consumers, increasingly interested in the provenance and impact of the goods we buy.

Don’t get me wrong: in the first instance, issues of ‘access’ or ‘choice’ are key to consumer behaviour. Within this hierarchy ‘value’ and a ‘fair deal’ are still and will remain primary drivers for purchasing decisions and consumer behaviour.

That is not going to change quickly. But what we are certainly seeing a further angle emerging to consumer behaviour, as that concept of a ‘fair deal’ and ‘fairness’ expand and the issue of ‘impact’ comes into play.

Why is this happening? Because we are worrying about whether our children will have a better life than we have; we are concerned about the concentration of power within businesses and institutions; and are increasingly unconvinced that the society we live in is fair.

That's the compelling conclusion of John Gerzema, a marketing guru and social strategist who pioneers the use of data to identify social change and help companies adapt to new demands, following his recent survey of 64,000 people around the world.

Why does it matter? Because in the second decade of the 21st Century digital technology is allowing people to interact with unprecedented amounts of information – in real time, whilst on the move.

What is more, it's allowing them to provide feedback and get their voice heard: not just as individuals, but as collectives – the likes of which world has never seen.

And this is not just about liking a Facebook update or signing an online petition. It’s about common cause and collective actions: the power of crowds to change corporate practice, the reverse auctioning of city-wide utility prices and the collective purchasing of essential services.

The world’s biggest brands see this and fear the implications.

It’s why corporate reputation is so high on their agenda. They know that, in order to secure the loyalty and trust of tomorrow’s consumers they must do all they can to appear responsible, accountable, transparent and engaging.

They can no longer just sell products, they must sell values, and do it with empathy.

Our recent global survey of consumer protection found less than half the 60 countries polled have measures to encourage ethical or socially responsible behaviour from companies. Yet some leading brands are presenting themselves as doing it anyway.

Today, the global CSR database Corporate Register contains 55,000 corporate responsibility reports from 11,000 companies in over 160 countries. In 2008 there were around 3,000 – that’s an 18 fold increase in six years.

Why the exponential rise in concern about reputation? Because brands see that consumer trust is up for grabs.

At the moment, trust is in flux. This new territory is still in play and consumer activists must seize this opportunity to align our movement with a changing world.

This means embracing digital technologies as the main driver for consumer information exchange, engagement and mobilisation.

It means being more agile and vociferous in calling out brands when they abuse consumer rights. And it also means seeking appropriate ways to work with them directly to drive more responsible behaviours.

Trans-global corporations, big successful businesses, are 10-15 years ahead of state and civil society in their thinking on these issues and have the bottomless resources to fund their planned occupation of consumer decision-making.

But consumers can be an army of collective voices – we can work together and win.

Developments in digital age technology will allow us to do it as this century takes shape, but make no mistake: those who believe in and stand up for consumer justice have a tough battle to keep hold of relevance and immediacy in people’s daily lives.

We must make sure we do not oversee a migration of trust away from truly impartial consumer champions. Consumer rights, not corporate rhetoric, should be the source of empowerment for tomorrow’s consumers. This blog is an abridged version of the speech Amanda Long, delivered to the 40th anniversary symposium of the Hong Kong Consumer Council, 7 April 2014.